> Hold on here... regardless of "infinite" volatility, the risk of a $300 buy order is at most $300, and when the brokerage is custodian of $300 settled real US dollars in the customer's account, there is no apocalyptic systemic risk.

While this does seem true, it appears the DTCC and the law don't care. It's my understanding that if a brokerage defaults on a payment to DTCC even once, it's game over. Brokerage goes out of business overnight. And the law prevents from brokerages from using client cash to make those payments.

> I would understand if this were simply a matter of Robinhood tightening margin requirements, but no, they were prohibiting all purchases, even from accounts with plenty of cash, and now we are hearing (not the first story they spun) that this was because of some nonsensical aspect of the DTCC collateral requirements (the buying customer's funds do not count and cannot be used as collateral).

This "story" has been said repeatedly, by very reputable sources and even by a direct competitor to Robinhood, long before Robinhood said anything about it. Robinhood is hardly the only brokerage to limit buying - TDA, Merrill, IBKR, and all Apex-cleared brokerages have also done so, though to a lesser extent. I have no love for Robinhood specifically and I frankly think that them going out of business would be a net benefit to retail investors. But I find it very hard to believe that this is a lie that Robinhood has fabricated.

Like I said, nothing Robinhood does to restrict margin requirements or require customers to put up cash helps them out of this situation. In the very short term, Robinhood must pay out of their pocket and it seems like they were simply incapable of doing so.

> Collateral shortfall would apply to all purchases of all stocks, wouldn't it? Why not cap all purchases? And what exactly were the collateral requirements on GME?

DTCC can set collateral requirements per symbol, as far as I understand. So they can jack up the requirements for GME while leaving other stocks untouched. Plus I'd guess most brokerages would rather halt a single symbol than completely shut down business for a whole day. As for what the exact requirements were, we may never know. It doesn't appear to be public information.

> Hilarious! This intra-day volatility was caused by the brokerage's actions.

Indirectly, maybe? Directly, probably not. Despite what wallstreetbets would have people believe, it seems like retail is not moving GME significantly. The same article shows Citadel's numbers for retail order flow and it's pretty much balanced buying and selling.